March 5, 2009

Local Housing Developer AF Evans Files For Bankruptcy Protection

In what's likely not to be good news for the development of 55 Laguna (at the very least with regard to timing), Oakland based developer AF Evans has filed for Chapter 11 bankruptcy protection citing "plummeting house prices and the credit crunch."

AF Evans Co. files Chapter 11 [San Francisco Business Times]
55 Laguna: The Plugged-In (And AF Evans) Development Update [SocketSite]

First Published: March 5, 2009 4:20 PM

Comments from "Plugged In" Readers

From the linked article:

"Started in 1977, the company focused on affordable and senior housing as well as apartment management for most of its history until about six years ago when it decided to add market-rate condominiums to its portfolio [emphasis added]."

Sounds like AF Evans couldn't resist the siren song of the Bubble. I'm sure they'll be just fine (the article mentions that they don't expect to lay off anyone as a result of the bankruptcy). You have to believe that there is a lot of taxpayer-provided free cheese in "affordable and senior housing" - and after being in business for 32 years they must know all the angles. Time to go back to its core competency I guess.

Posted by: LMRiM at March 5, 2009 7:26 PM

Whether they're going to be OK or not, it's still an unfortunate circumstance. Kinda sad, actually. Everyone goes into business hoping to make a buck or two. Too bad the timing was wrong.

Posted by: :( at March 5, 2009 9:07 PM

Everyone to whom they owe money will be pretty much SOL, and creditors of other developers will tighten up, making it more difficult for everyone else.

Posted by: tipster at March 6, 2009 9:00 AM

But that's unfair!

We can't just sit back and let lenders discriminate on the basis of wanting to be paid back. That's un-american!

Chris Daly needs to DO SOMETHING!

Posted by: diemos at March 6, 2009 9:09 AM

Dont trust the government is my song for 55 Laguna. That land was donanted to the state as an educational site. I dont know why anyone thinks putting up more junky market rate condos would be an improvement to the neighborhood.

We need schools. We need Great Schools. We need the whole world is talking about it schools.

Build a great PUBLIC school at 55 Laguna.

Surely this town can support something more than private art schools?

How about a Craig Newmark Internet University?

We can teach joisey speak... and classes on how to get along and get out of the way.

Posted by: kathleen at March 6, 2009 10:12 AM

Homeowner's dues were used to pay for the electrical construction expense at Market Square Phase II in Oakland without being disclosed to homeowners. We recently sent them a demand letter for $163,970.40. They also sold 4 of our guest parking spaces at $30,000 a piece before the City of Oakland put a stop to that. I'm not hopeful that the homeowners will recover any of the monies the developer used.

Posted by: MSQhomeowner at March 6, 2009 1:34 PM

AF Evans is a great company with a noble vision.

I wish them a speedy reemergence out of bankruptcy.

That won't be easy, but I know the team is strong and I am optimistic.

Posted by: Paul Smith at March 6, 2009 3:45 PM

MSQHomeowner -- you can kiss that $163k goodbye! Eventually (like, next year) you'll get a judgement, then you can get in line behind all the other creditors.

I wonder if there will be a special assessment for the existing owners to pay (twice) the HOA dues that were misappropriated to make up the shortfall that the HOA must be experiencing now.

Hope your electricity and gas don't get shut off.

(Another undisclosed risk of owning a condo in a declining market, I guess ...)

Posted by: Jimmy (No Longer Bitter) at March 6, 2009 3:51 PM

Another unfortunate impact of AF Evans filing Chapter 11 is that UC Extension is very dependent on the income from the 55 Laguna project to keep operating. The buildings are not seismically up to code for public assembly (the University) and UC made the decision to develop them and move to a rental facility. Now they have the lease to pay, and no income from the property. While Extension is part of the University of California system, they have to be self-supporting, and tuition doesn't cover it. Ironic, all the self-rightous people who have been fighting the development and demanding the campus be saved for educational purposes will be the ones responsible for the potential demise of a fine educational institution.

Posted by: Jim at March 9, 2009 11:54 AM

Reading what MSQhomeowner wrote shocks me. BTW, this is not the first I have heard of this, either.

What AF Evans did is outright theft. They took all of these moneys that did not belong to them (through whatever means I have no idea), and used it for themselves. This is a lot of money, at least to me this would be a lot of money.

The shocking part is, I haven't seen this reported ANYWHERE. Nobody seems to care. People are so numb that this just ... blends in.

Posted by: dweeb at March 9, 2009 4:46 PM

Market Square isn't the only development where AF evans has used HOA dues to pay developer expenses. The same management company was set up at 888 Seventh, a mostly BMR development in San Francisco. UNC Management and Af Evans manipulated the HOA election and withholds records to maintain control of the HOA funds. Yes, it just seems to blend in, with no one caring too much, including the City!

Posted by: 888resident at April 9, 2009 8:47 AM

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